INDIRECT COST RATES - National Institutes of Health · INDIRECT COST BRANCH • The Office At NIH...
Transcript of INDIRECT COST RATES - National Institutes of Health · INDIRECT COST BRANCH • The Office At NIH...
INDIRECT COST RATES
• WHAT ARE INDIRECT COST RATES????–Indirect Cost Pool-How Deep?–Indirect Cost Base-How Large?–Indirect Cost Rate-How High?
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AGENDA
• Who Are We- Indirect Cost Branch• Definitions• Why Indirect Cost Rates Are Needed;
Including An Example • The Negotiation Process; Including How
To Start The Process2
INDIRECT COST BRANCH
• The Office At NIH With The Responsibility Of Negotiating INDIRECT COST RATES With COMMERCIAL ORGANIZATIONS Receiving Awards (Grants & Contracts) With NIH- SBIR & STTR
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TYPES OF COSTS• DIRECT COSTS: Easily Identified
With A Specific Project:- Direct Salaries & Wages- Materials & Supplies- Consultants & Subcontracts
TYPES OF COSTS (Continued)• INDIRECT COSTS: Not Easily
Identified With A Specific Project- Fringe Benefits- Overhead- G&A
FRINGE BENEFITS• Allowances And Services Provided To
Employees- Pd Abs (Vacation, Holiday & Sick Leave)- Payroll Taxes- Pension Plan- Group Ins (Health, Life & Disability)
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OVERHEAD COSTS• Indirect Costs Relating To The
Performance Of A Project- Overhead Labor (e.g.; supervision, general
meetings)- Fringes On Overhead Labor- Facility Costs & Depreciation- General Lab Supplies
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G&A COSTS
• Indirect Costs Associated With The Overall Management Of The Company- Executive & Administrative Labor- Fringe Benefits On G&A Labor- Professional Fees (CPA)- Office Supplies
IDC RATES ARE NEEDED
• To Provide A Uniform Method– Funding Indirect Costs– Charging Indirect Costs
• To Provide An Equitable Allocation Of Indirect Costs Across All Projects
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INDIRECT COST RATE
• A Method For Allocating Indirect Costs To Projects
• Ratio Between Indirect Costs (Pool) And An Equitable Base
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TYPES OF RATES• Three Types Of Rates
– Provisional Rates• Based On Projections For Current FY• Used For Funding & Charging
– Final Rates• Based On Actual Costs• Charges Adjusted To Reflect Final Rates
– Ceiling Rates• Final Rates Cannot Exceed
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INDIRECT COST RATE SYSTEMS
• One Tier System: One Pool– Fringe Benefits, Overhead & G&A
• Two Tier System: Two Pools - Typically– Fringe Benefits– Overhead and G&A
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INDIRECT COST RATE SYSTEMS (Continued)
• Three Tier System: Three Pools– Fringe Benefits– Overhead– G&A
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INDIRECT COST RATE (Example)
• EXAMPLE COMPUTATION- TWO TIER– Fringe Benefit Rate
• POOL: Pd Abs, Payroll Taxes, Pension & Group Insurance
• BASE: Total Labor-Direct & Indirect Excluding Pd Abs
• RATE: POOL Divided By BASE
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INDIRECT COST RATE (Continued)
• EXAMPLE-CONTINUED– Indirect Cost Rate
• POOL: Overhead & G&A Costs• BASE: Total Direct Cost Excluding Equipment
& Subcontract Costs In Excess Of $25,000 Per Subcontract Per Project Period
• RATE: POOL Divided By BASE
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NEGOTIATION PROCESS(Step 1)
• CONTACT INDIRECT COST BRANCH:– When: Notification Grant/Contract Is Going
To Be Awarded
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NEGOTIATION PROCESS(Step 1 -Continued)
– Information Needed:• Representative Name & E-Mail Address• Company Name & Address• Grant/Contract Number• Grant/Contract Specialist’s Name
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NEGOTIATION PROCESS(Step 2)
• Indirect Cost Branch Requests Indirect Cost Proposal:
– Letter: Via E-mail
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NEGOTIATION PROCESS(Step 3)
• Indirect Cost Proposal Submitted • Indirect Cost Branch Reviews Proposal• Indirect Cost Branch Follows-up With
Questions To Company
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NEGOTIATION PROCESS(Step 4)
• NEGOTIATES RATES WITH COMPANY– Typically By Phone– Rate Agreement Is Issued Or Rate Memo Is
Sent To Grant Specialist
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FINALLY
• WE ARE DONE!• NOW THAT WAS NOT SO BAD!• WAS IT?• GUESS WHAT?• WE ARE GOING TO DO IT AGAIN
NEXT YEAR!21